Foreign Financial Influence and Interference: UK Politics

Nusrat Ghani Excerpts

Wednesday 25th March 2026 Commons Chamber

[The Secretary of State for Housing, Communities and Local Government (Steve Reed)]

I would like to make a statement on foreign influence and interference.

The responsibility of protecting our democracy is a duty that every single Member of this House shares. As a Government, we are clear-eyed about the evolving threats we must contend with from those who wish to disrupt our democracy for their own gain and their own twisted purposes. We already have a strong toolkit to detect, disrupt and deter interference, and we are strengthening it through our Representation of the People Bill and counter political interference and espionage action plan. But as threats evolve, so too must our protections. For this reason, I announced in December an independent review led by the former permanent secretary, Philip Rycroft, into foreign financial interference in UK politics. I would like to place on the record my thanks to Mr Rycroft for his thorough, diligent and swift work in rigorously assessing our political finance framework and identifying where further safeguards are needed. The full report from his review has today been laid before the House, and the findings are stark. Mr Rycroft concludes that this country faces a persistent problem of foreign interests seeking to exert influence on, and to interfere in, our politics, and that the threat has become arguably more acute. While he welcomes the measures in our Bill, the report is clear that we need to go further, and I agree.

We welcome Mr Rycroft’s assessment and his wide-ranging recommendations, which cover the regulation of corporate and overseas donations, the need to close loopholes used by some non-party campaign groups, the approach to combating online threats, the importance of ensuring that enforcement agencies have the information and powers they need, and the organisation of Whitehall to ensure that we are best placed to tackle these threats.

In advance of the Commons Report stage of the Representation of the People Bill, we will provide a comprehensive, line-by-line response to all the report’s recommendations. I am clear that, wherever necessary, we will amend the Bill to ensure that our defences against foreign interference are robust. Given the gravity of the threats we face and their level of seriousness, I reassure the House that we will take immediate action on the most serious loopholes set out in the report that allow illicit foreign money into our democracy.

British citizens living overseas have the right to participate in UK parliamentary elections, and that gives them the right to donate to parties or candidates they support. However, the report raises two fundamental concerns about such donations from overseas. First, the report is clear:

“Inevitably, tracing the source of funds offered by individuals living abroad is more complex than for domestic donations.”

Secondly, it raises concerns about the “democratic fairness” of allowing people

“who have chosen to live abroad in order to have their wealth taxed abroad”

none the less to

“have the opportunity to make potentially game-changing donations into British politics.”

I will therefore take immediate steps to implement the report’s recommendation on donations from overseas electors. We will introduce an amendment to the Representation of the People Bill to place an annual cap on the total political donations that an overseas elector can make. The cap will be set at £100,000 a year. In the light of the gravity of the issues raised in the report, I am not prepared to allow any window of opportunity in which malign actors based overseas can funnel dark money into our politics. The cap will therefore apply retrospectively, so it will include all donations from overseas electors received from today and all regulated transactions entered into from today.

Once the provisions are in force, any donations by an overseas elector to any political party or regulated entity that exceed the cap for that overseas elector will be an unlawful donation. Subject to parliamentary approval of the amendment that I will table, the recipient of any unlawful donation will have 30 days to return that donation once the legislation comes into force, after which enforcement action can be taken and criminal penalties will apply.

The cap will apply to relevant donations from today in all elections in the UK, including for parties at the upcoming English local elections, Scottish Parliament elections and Senedd elections. In Scotland and Wales, donations to candidates rather than parties are devolved matters, but my intention is to seek a legislative consent motion for our amendments to ensure that there are no gaps in our safeguards. I will speak to my counterparts in the Scottish and Welsh Governments to emphasise my commitment to work together to protect our electoral system right across the United Kingdom.

The second recommendation on which I will take immediate action relates to donations made in cryptocurrencies. Following extensive consultation, Mr Rycroft sets out clearly the deep reservations that many people have about such donations, and his conclusions are clear that

“there is a risk that cryptoassets are used as the vehicle to channel foreign money into the political system in the UK…we should pause the use of cryptoassets for political donations for the time being.”

I accept Mr Rycroft’s assessment that the anonymity inherent in cryptocurrency transactions could make it easier to mask the origin of donations and to evade robust checks on the true source of funds. The clear route that that creates for illicit channelling of money into our politics is unacceptable and undermines public confidence in our electoral system.

In the light of that, I can confirm that the Government will take immediate steps to implement the recommendation made in the report, and we will introduce an amendment to the Representation of the People Bill to place a moratorium on all political donations made through cryptocurrency. I want to be crystal clear: as the report recommends, I mean crypto in any amount, including donations of a value that would ordinarily fall below the threshold for control on donations. There are specific risks posed by cryptocurrency donations, such as the risk of rapid multiple small donations being made just below our current thresholds.

The moratorium will remain in place until the Electoral Commission and this Parliament are satisfied that there is sufficient regulation in place to ensure full confidence and transparency in donations that are made in that way. Subject to parliamentary approval, the moratorium will be applied retrospectively to any crypto donations received from today by any political parties and regulated entities. Once the provisions are in force, if a political party or regulated entity has received a donation in the interim, they will have 30 days to return it, after which enforcement action can be taken and criminal penalties will apply. That will again apply to all elections in the United Kingdom. As I have set out, we will work with devolved Governments to secure legislative consent where that is required.

I would like again to express my thanks to Philip Rycroft for his comprehensive, thoughtful and well-reasoned report. It is, and always will be, an absolute priority for this Government to protect our democratic and electoral processes. The swift and decisive action being taken by this Government sends a clear message: we will do everything necessary to protect the UK’s democracy. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Those Members who have come into the Chamber extremely late will not be called to participate in the statement. Members have to be here for the beginning of a statement, not for the last minute of it.

I call the shadow Secretary of State.

--- Later in debate ---

[Steve Reed]

I thank the Chair of the Select Committee for her questions and for her support for this work. The intention is to bring the amendments forward on Report. In advance of those amendments being laid, we will provide a detailed response to each of the 17 recommendations, including the one to which she has just referred.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Steve Reed]

I thank my hon. Friend for her support and her active interest in making sure that the legislation that follows is as robust as possible. I would be more than happy to make sure that she has a meeting with me or the relevant Minister to discuss her amendments. The report and its recommendations cover some of her concerns, and it is our intention to amend the legislation to deal with those concerns.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Public Administration and Constitutional Affairs Committee.

[Simon Hoare (North Dorset) (Con)]

As a former elections policy Minister and member of the defending democracy taskforce, may I thank the Secretary of State for launching this inquiry? I also thank Philip Rycroft for his work; it was a pleasure to give evidence to him during that process.

I welcome the spirit in which the Secretary of State has brought forward with urgency the changes that are so demonstrably required. May I ask him two direct questions? If amendments to reflect the Rycroft report are not to be tabled at Committee stage but on Report, will he ensure through the usual channels that the length of time devoted to Report stage reflects the fact that the House will be debating for the first time amendments to the legislation, which were not included on Second Reading? That speaks to the process point made by the shadow Secretary of State, my right hon. Friend the Member for Braintree (Sir James Cleverly).

If these important new rules are to be policed effectively and properly, there will clearly be additional demands on the Electoral Commission both in terms of power and resource. What assessment has the Secretary of State made of those needs and how will they be delivered in speedy time to mirror the urgency that is required?

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker]

Order. I appreciate that colleagues want to be forensic in their questioning, but shorter questions will be very much appreciated. I call Dr Andrew Murrison.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Mr Rycroft’s wide-ranging review makes the non-inclusion of China—or, failing that, its constituent entities—in the foreign influence registration scheme look increasingly bizarre. Will the Government look at this again as a matter of urgency? If it is the case that the FIRS is inadequate to include the state entity or its constituent parts in the meaning of the scheme, will he look to review it and perhaps replace it with something that will achieve the same end?

--- Later in debate ---

[Suella Braverman (Fareham and Waterlooville) (Reform)]

I am going to mention the elephant in the room. Earlier this month, the husband of a sitting Labour MP—the hon. Member for East Kilbride and Strathaven (Joani Reid)—was arrested on suspicion of spying for China. The hon. Member was subsequently suspended from the Labour party. It has been reported that she received a donation from her husband’s firm, which presumably would be covered by the Government’s plans. I do not expect any comment on that live investigation, but in the light of that and the historic case of Christine Lee, Labour MPs and the Chinese Communist party, will the Secretary of State confirm that the measures he has announced will apply equally to members of his own party who find themselves compromised by the Chinese Communist party?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Before the Secretary of State responds, the right hon. and learned Member for Fareham and Waterlooville (Suella Braverman) will know that when we plan to mention colleagues in the Chamber, we give them notice.

[Suella Braverman]

indicated assent.

[Madam Deputy Speaker]

She is saying that she has done so. We obviously do not mention live cases either.

[Steve Reed]

The right hon. and learned Member, as a former Home Secretary, will of course know that I cannot comment on ongoing investigations. The provisions of the legislation that we will bring forward—as with all legislation—will apply without fear and favour to members of all parties, as indeed does the bribery legislation that applied to Nathan Gill, a traitor who was the leader of Reform in Wales.

--- Later in debate ---

[Steve Reed]

I thank the hon. Gentleman for his question and for his deep interest in this entire matter. Our intention is to ensure that the safeguards we put in place are robust enough to ensure that no dirty or dark money can enter British politics in any way or from any source. I am always more than happy to continue to engage with him about any specific concerns he may have.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I am completely disappointed with myself for not wishing the hon. Member for Strangford (Jim Shannon) a happy birthday today. [Hon. Members: “Hear, hear!”] That is why his question was allowed to be a little bit longer than usual, but hopefully it will not be next time.

[Chris Hinchliff (North East Hertfordshire) (Lab)]

I welcome this statement. The public must have confidence that political decisions are made in their interests, not those of wealthy donors. Nowhere is that more important than in relation to the housing crisis, where there are also significant concerns that vested interests are seeking to exert significant influence on policy making. Will the Secretary of State meet me to discuss my proposed amendment to the Representation of the People Bill to ban developers from donating to politics and restore trust in our planning system?